What is 0DTE (Zero Days to Expiration)?
Options that expire the same day they are traded.
📖 Complete Definition
0DTE options are contracts that expire on the same trading day. They've become extremely popular due to high gamma (explosive moves) and low premium costs. SPX offers daily expirations enabling 0DTE trading every day. While potentially profitable, they carry extreme risk due to rapid time decay and high gamma swings.
💡 Examples
- →Buying an SPX call at 10am that expires at 4pm the same day
- →0DTE options can move 100-500% or go to zero in hours
❓ Frequently Asked Questions
Why are 0DTE options so risky?
Extreme theta decay and high gamma create rapid, unpredictable price swings. You can lose 100% of your investment in hours, and timing must be precise.
What are the best strategies for 0DTE?
Popular approaches include scalping directional moves, selling credit spreads, and iron condors. Risk management and position sizing are critical given the speed of moves.
🔗 Related Terms
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